skills/event-driven-analyzer/references/restructuring_special_situations_playbook.md

# Restructuring and Special Situations Playbook

Use this reference for dated public special-situation events adjacent to distressed securities, exchange offers, liability management, bankruptcy process milestones, index events, de-SPACs, rights offerings, warrants, preferreds, and technical situations.

Boundary: this event-driven skill owns the dated public-equity event path, probability tree, timing, payoff bridge, expected return, listed-equity expression, and monitoring. Credit Markets owns capital structure mapping, covenant/document review, liquidity, maturity wall, priority, fulcrum-security analysis, and recovery waterfalls. If those credit outputs are not already available and drive the answer, route that portion to Credit Markets and use the results here as terminal payoff inputs.

## Distressed / restructuring objective

Answer: Which dated restructuring, exchange, court, maturity, or liability-management event changes price before the market updates, and what are the scenario payoffs and probabilities?

## Required fact pack

- Issuer, tickers, securities.
- Dated catalyst: exchange deadline, forbearance date, maturity, coupon date, RSA milestone, court hearing, vote, plan confirmation, rights offering, index/technical date, or lockup/float event.
- Current security price, timestamp, liquidity, borrow, and expected holding period.
- Existing terminal payoff or recovery assumptions, clearly labeled by source.
- Debt prices, yields, spreads, CDS if available.
- Equity market cap and enterprise value.
- Exchange offer / LME / RSA / bankruptcy status.
- Court dates, creditor groups, DIP, plan, disclosure statement if applicable.
- Credit inputs to source from Credit Markets when needed: capital structure, maturity wall, liquidity runway, covenant headroom, collateral, guarantees, structural subordination, intercreditor terms, priority, value break, fulcrum security, recovery values, and plan valuation.

## Distressed workflow

1. Confirm whether the task is an event-path question or a credit/recovery question. Route credit/recovery work to Credit Markets.
2. Identify the dated catalyst: maturity, covenant test date, interest payment, lawsuit, exchange deadline, RSA, court hearing, vote, confirmation, or technical event.
3. Convert supplied credit/recovery assumptions into event terminal payoffs.
4. Build scenario probabilities, timing, expected value, and downside.
5. Assess legal/process risks as event-path risks: priming, uptier, drop-down, fraudulent transfer, class vote, cramdown, appeal.
6. Recommend listed-equity or event expression only if payoff inputs are sufficiently sourced or clearly caveated; route debt-security expression to Credit Markets.
7. Build monitoring plan and kill criteria.

## Distressed senior judgment questions

- Is equity a real option or simply retail optionality?
- If a fulcrum security matters, has Credit Markets supplied the liquidity and ownership view?
- Can the company execute an out-of-court exchange?
- Who has blocking position or control?
- Is there priming risk or collateral leakage?
- Does the recovery depend on business value or litigation leverage?
- Is the price compensating for process complexity and time?

## Index and technical events

Use when the catalyst is forced buying/selling, index inclusion/deletion, rebalance, lockup expiry, flow event, convert technical, warrant exercise, rights offering, or float change.

Analyze:
- Event date and mechanics.
- Who must buy/sell.
- Estimated flow vs average daily value traded.
- Float and liquidity.
- Crowding and pre-positioning.
- Borrow and options.
- Fundamental anchor after the flow.
- Exit plan.

Senior questions:
- Is the flow already priced?
- Is there enough liquidity to monetize the dislocation?
- Does the trade have a fundamental floor after the technical pressure ends?
- Is the flow one-day, multi-day, or persistent?

## De-SPAC / SPAC situations

Analyze:
- Trust value.
- Redemption deadline and expected redemption rate.
- PIPE size and conditions.
- Minimum cash condition.
- Sponsor promote and earnout.
- Warrant dilution.
- Lockups.
- Float and borrow.
- Projections quality.
- Post-close liquidity and financing need.

Senior questions:
- Is the target viable without projected growth?
- Does redemption break the minimum cash condition?
- Is float so small that price action is technical rather than fundamental?
- Are warrants or converts a better expression than common?

## Rights offerings and capital raises

Analyze:
- Subscription price.
- Oversubscription rights.
- Backstop party and fees.
- Use of proceeds.
- Dilution.
- Shareholder participation incentives.
- Trading value of rights.
- Balance-sheet impact.

Senior questions:
- Is the capital raise value creating or a rescue financing?
- Is the backstop extracting economics from non-participating shareholders?
- Are rights mispriced relative to common?

## Preferreds, warrants, converts, and stubs

Analyze:
- Conversion/exercise terms.
- Call/put features.
- Dividends/coupons and arrears.
- Change-of-control provisions.
- Liquidity and borrow.
- Path to monetization.
- Control-party incentives.

## Output requirements

- Security expression and any required handoff to Credit Markets.
- Event/catalyst timeline.
- Scenario tree.
- Recovery, SOTP, or payoff value only where sourced, supplied, or incorporated from Credit Markets.
- Best expression and why.
- Liquidity/crowding/borrow assessment.
- Monitoring plan.
- Red-team critique.

## Credit Markets Boundary

Distressed exchange, bankruptcy, covenant, recovery, and debt-security selection route to Credit Markets. Public Equity Investing may use Credit Markets outputs only as inputs to a listed-equity event view.